(Oct 28): Danone SA sales climbed in the third quarter, driven by higher prices and persistent demand for its protein-rich yoghurts and fortified drinks for the elderly and ill.

Like-for-like sales rose 4%, the producer of Oikos Greek yoghurt said in a statement Wednesday, above the 3.7% estimate of analysts in a Bloomberg survey. Increased pricing added 3.6% to sales growth — a bigger share than expected — while volume growth lagged.

The specialised nutrition unit showed the strongest jump in sales, topping estimates on strength in Asia and the Americas. A poor performance linked to adverse weather hit the Mizone waters business in Asia, shaving a percentage point off group sales growth in the quarter.

The results are “a mixed bag", Jefferies analysts led by David Hayes said in a note.

The shares rose as much as 2.7% in early Paris trading. The stock was down 20% this year through Tuesday’s close, trailing rival Nestle SA and on course for the worst annual performance since 2020.

CEO Antoine de Saint-Affrique has led a turnaround in five years atop the company by shedding weaker businesses and expanding in areas like high-protein dairy offerings and food for cancer patients. The rise of weight-loss drugs has spurred demand for protein-rich, gut-friendly products.

Still, weakness in the US has weighed on sentiment. Danone announced a host of changes to boost performance in the US “with a sense of urgency", deputy CEO Juergen Esser told investors Wednesday. “We are obviously not satisfied with this performance in light of a market which is growing faster.”

Danone has added production capacity of high-protein yoghurts at four of its US factories and will continue to add more. “Capacity is at the end of Q3 no longer a limiting factor to our growth,” Esser said.

Another change is new leadership, bringing Francois Lacombe from Danone’s Spanish business across to the US. Danone next year will also launch kefir, fibre-enriched products and a new natural Greek yoghurt to add to its existing “performance” Greek yoghurt brand, Oikos.

Danone confirmed its guidance to increase like-for-like sales between 3% and 5% this year, with recurring operating income growing faster than sales.

Earlier this year, Danone agreed to buy UK-based Huel, a maker of fortified protein powders and ready-to-consume drinks and meals popular with gym-goers. It also acquired Australian dairy company Made Group to expand its offerings of coconut water and protein shakes in Asia.

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